The status of Bitcoin legality varies significantly from one country to another, and changing any one of them seems unknown for now. While many countries do not see Bitcoin and its adoption as illegal, its status as money or a product varies, with different regulations.
The decentralized nature of Bitcoin has effectively reduced the power of the government, central banking system, and other centralized institutions. It has ensured that decision-making power is shared among its active members. As a result, the governments of most countries have seen Bitcoin as a threat since they cannot control it. This has made them enforce regulations on the network.
While some countries have supported its use and trade, others have banned or restricted its adoption. Similarly, many government agencies, departments, and the media have viewed bitcoins differently. This article offers a deep insight into the legal status of Bitcoin in different countries.
How is Bitcoin regulated in different countries?
The regulations imposed on Bitcoin and its operation in several countries are explained as follows:
The purchase, holding, or sale of Bitcoin is prohibited in the country. Any breach of this rule is subject to punishment, in accordance with the law of the country.
The adoption of digital currency is supported and there is no legislation against it. However, the government has advised people against its usage.
The Central Bank of Bolivia issued a total ban on the usage of Bitcoin and other unregulated cryptocurrencies by the economic zone. Its usage is totally against the law.
Bitcoin usage is legal in this country. Yet, it is however discouraged due to the risks associated with its operation. The Department of Federal Revenue of Brazil published a document that showed the taxes imposed on Bitcoin and other cryptocurrencies within the country.
It is legal within the country. However, any company that deals with digital currencies must duly register with the Financial Transactions and Reports Analysis Centre of Canada, execute the compliance programs, and keep the necessary records.
All companies dealing with cryptocurrency must register with FINTRAC before they can have any relationship with banks.
The Central Bank of Nigeria distributed a circular that stated that all bank transactions in Bitcoin and other digital currencies are banned in the country. Then, a committee was set up to determine the possibility of adopting the Blockchain technology. The report submitted by the committee stated that “several sub-committees are still working on the issue.” However, as of the time of writing, Bitcoin and other cryptocurrencies remain banned in the country.
The United Kingdom
The British government stated that Bitcoin is unregulated and considered it “a foreign currency”. It is often seen as private money, and as a result, whenever it is exchanged for pounds, Euros, or Dollar, no VAT will be charged on the Bitcoin value. Profits and losses on Bitcoin trading are subject to capital gain taxes. Further, an industry, called CryptoUK, is committed to raising the industry standards of Bitcoin. This will improve the Anti-Money Laundering and security measures. It is also worth noting that if you want to choose a reliable British Trade Platform, ensure that they can operate within your jurisdiction.
The United States of America
Bitcoin is viewed as a decentralized digital currency that can be easily convertible by the United States Treasury. If there is a significant number of Bitcoin trading is done in the US, the company must do the following:
- Register with the United States FinCEN and
- Implement the Anti-Money Laundering (AML) program
- keep and make reports to FinCEN.
In 2016, a federal judge ruled that “Bitcoins are funds within the plain meaning of that term”.
As Bitcoin keeps growing in popularity and influence, the regulations that are imposed on its usage will also keep changing. How it changes entirely depends on the nation’s government.